There is no one-size-fits-all answer to what constitutes a "good" EPS(TTM), as it can vary significantly depending on the industry, company size, and market conditions. However, here are some general guidelines:
1. Industry norms: In some industries, such as technology or healthcare, EPS(TTM) might be expected to be higher due to the nature of their products and services. Conversely, in industries like utilities or telecommunications, EPS(TTM) might be lower.
2. Peer comparison: Comparing a company's EPS(TTM) to its peers within the same industry can provide a better understanding of its performance. If a company's EPS(TTM) is above the average for its industry, it may be considered good.
3. Growth rate: A company that is experiencing consistent growth in EPS(TTM) over time may be considered good, even if the absolute value is not exceptionally high. This indicates that the company is increasing its profitability at a steady rate.
4. Sector benchmarks: Within a particular sector, there may be established benchmarks for what constitutes a good EPS(TTM). For example, in the S&P 500, the average EPS(TTM) is around $1.82 as of 2021.
5. Company-specific factors: Companies with higher debt levels or those undergoing significant restructuring may have lower EPS(TTM) despite still being profitable. These factors should be considered when evaluating a company's financial performance.
In general, a good EPS(TTM) can be considered to be:
- Above the industry average
- Consistently increasing over time
- Sufficient to cover interest expenses and other essential costs
- Positive and not negative, indicating profitability
Ultimately, the definition of a "good" EPS(TTM) will depend on the specific circumstances of each company and industry.
11/1/2024 10:09pm
